SExI - Super Exhaustion Indicator [Da_Prof]

٢٥ أغسطس

As we know, the RSI can remain at "overbought" or "oversold" levels for long periods of time while the price continues in that direction. The SExI (Super Exhaustion Indicator) is an indicator designed to help detect exhaustion of strong moves.

The SExI is a combination of the RSI and "upper" Aroon. For the indicator to trigger, the RSI has to be above or below a top/bottom trigger line when the Aroon has had a set number of drives up or down correspondingly. An Aroon top drive is defined as the Aroon hitting 100% on the current candle when the previous candle was below 100%. An Aroon bottom drive is defined as the Aroon hitting 0% on the current candle when the previous candle was above 0%. Consecutive top or bottom drives are counted and exhaustion triggers when these drives hit a setpoint (default is 5 drives = the Aroon exhaustion trigger). When Aroon exhaustion is triggered and the RSI is correspondingly above/below a trigger line, the overall indicator signals exhaustion. There are two lines for bottoms and tops, one each for a "normal" trigger and and an "extreme" trigger.

The Aroon drives are visualized at the top and bottom of the indicator. The RSI is plotted as a line that crosses top and bottom trigger lines. There are extreme trigger values for both the bottom and top exhaustion triggers.

--Da_Prof

٨ سبتمبر

ملاحظات الأخبار

Some minor updates to the look of the indicator were accomplished.

Here is a color key for the trigger colors:

Red = high risk trigger
Yellow = extreme high risk trigger
Green = low risk trigger
Bright Green = extreme low risk trigger

While there are many ways to utilize the indicator, the basic way is to wait for extreme low risk triggers to indicate a potential low risk environment for the asset price. There are many times where the trigger isn't the macro low, so historical behavior of the indicator with the asset is warranted. Their are many times where a bullish divergence occurs in these environments (i.e., higher low on the RSI, but lower low on the price). The inverse is true for high risk environments, but these are even more tricky and more often the SExI trigger is not the macro high. A divergence (i.e., lower high on the RSI and higher high on the price), and even multiple divergences may occur. It is important to use context and other information to decide when you are comfortable or not continuing to hold an asset.

Hope that helps.

--Da_Prof